Emmet County parcels up for bid

Saturday

Oct 13, 2012 at 12:55 AM

The local oil and gas boom has diminished some since 2010, when interest in northern Michigan reached a fevered pitch, but gas leases are still be offered, including some parcels of state land that will be auctioned later in October.

Mark Spencley

The local oil and gas boom has diminished some since 2010, when interest in northern Michigan reached a fevered pitch, but gas leases are still be offered, including some parcels of state land that will be auctioned later in October.A total of 29 parcels will be offered in northern Michigan on Oct. 24, one in Presque Isle County and 28 in Emmet County. Across the state, more than 195,000 acres in 22 counties will be up for bid. Though outsider buzz over oil and gas isn’t what it was a few years ago, the market is still booming. Natural gas prices are on the rise and the forecast for a cold winter will likely continue the trend.Though Cheboygan County isn’t included is this auction, the area is still very active as far as oil and gas is concerned.According to Mary Uptigrove, manager of the DNR’s Minerals and Management Section, there are more than 1,300 active leases in the Cheboygan area currently. Oil and gas lease auctions are a semi-annual event in Michigan — once in the spring and once in the fall. The parcels for this spring’s auction have not yet been determined.Contrary to common belief, a lease of mineral and gas rights from the DNR does not permit a company to drill a well. In fact, there are three categories of mineral and gas leases offered by the DNR, only one of which allows unrestricted drilling sites.“It’s important to understand the classification of lease,” said Uptigrove. “Just because a company obtains an lease doesn’t mean they can or will put up a well.”The three classifications of mineral and gas leases are non-development, development, and restricted development. The regulations for each are fairly straightforward. Non-development leases do not allow surface drill sights to be established, development leases allow drill sites, and restricted development leases place restrictions on surface drill sites.Even for leases that allow drilling, the Department of Environmental Quality has final say on drill sites.“We don’t have anything to do with the drilling permits,” explained Uptigrove. “That’s all through the DEQ. They have a process for that.”Though companies can purchase lease rights to the oil and gas under the surface of state property, that property remains public and continues to be accessible for hunters and outdoorsmen. “The land itself is still public,” Uptigrove said. “The mineral rights have been leased, but as far as people hunting or hiking or doing that sort of thing, the land is still public.”While land use is of particular intest to the general population, those purchasing oil and gas leases are typically interested in one thing — a payday. The revenue generated by a successful oil or gas well can be instant and immense.Plenty of people are interested in the prospects of a large payday, evidenced by the large crowd expected at the upcoming auction. In fact, the auction has been moved to the Lansing Center to accommodate the swelling crowd.The more people that turn out, the more revenue the Department of Natural Resources generates.“Proceeds from state-owned mineral lease rights are used to purchase public land for public use; the maintenance and upgrade of state and local parks; and the care and preservation of wildlife habitat,” explained Uptigrove. “All Michigan residents have an increased opportunity to use public lands for many recreational pursuits because of the leasing of these rights.”